Restructuring and Members Voluntary Liquidation
The two main tools for removing a company from the register, a common objective of restructuring plans, are:
Members Voluntary Liquid
A members voluntary liquidation is a procedure to be used when a company is solvent and can pay its debts in full in 12 months and is used either in a restructuring sense or to realise funds to be repaid to shareholders. The Directors will be asked to swear a declaration to this effect.
The key advantages of this procedure are:-
- The ability to return funds to Shareholders as capital – which can have considerable tax advantages
- The ability to restructure a business, perhaps using a hive down and to distribute assets (or shares in subsidiaries) in specie
- Can be used as a means of resolving a shareholder dispute
- The process is quick and fairly cheap compared to other restructuring procedures.
Striking off under Section 652 Companies Act
In certain circumstances it is appropriate to have the company simply struck off – but care needs to be taken to avoid some pitfalls.
Click here for a fuller discussion on this Companies Act procedure.